Silver Price Analysis – Silver Tests 50-Day EMA as Yield Dynamics Cap Gains

Silver Technical Analysis

The silver market rallied a bit during the early part of the trading session here on Wednesday as it looks like we are threatening the 50-day EMA. We have pulled back just a touch from there, showing signs of hesitation. A little bit of technical resistance has come into the picture.

Interest rates in America started to fall early during the session, but they have ticked a little bit higher, not enough that I think it makes a huge difference at the moment, but it is something to keep an eye on. Silver of course, is very sensitive to rising interest rates, as it is more enticing for some to buy paper that yields instead of a non-yielding asset that traders have to store and pay to store like silver.

Mean Reversion Trade Eyes $60 Magnet

We’ve been in a range for a while now and we are testing the top of it. Whether or not we can break out remains to be seen, but this is certainly a market that I’ll be watching closely on Wednesday. Short-term pullbacks are very possible here, with the $60 level being a bit of a magnet for price. It does make a certain amount of sense for a reversion to the mean trade.

There are no major economic announcements coming out during the session, so that could help as well. But we also have a lot of confusion and a lot of back and forth coming out of the Middle East, which obviously has its part to play in the interest rate markets. So the one thing I do expect is choppy behavior.

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